RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

Forums › Transport (cars, bikes and boats) › RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

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2405 posts

Uber Geek

#3191180 5-Feb-2024 17:58

It wil be interesting to see how this hits the biggest part of our car market Japanese imports.
If PHEVs took off in Japan the source of many of our vehicles.

Hopefully there will be enough non-PHEV options in imports.

The battery size is 1/10th to 1/5th the size of comparable full EV's so to cover any significant distance you are on petrol anyway.
They are not like logging trucks chewing small communities' roads to dust.

cshwone

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#3191182 5-Feb-2024 18:03

SaltyNZ:

cshwone:

All that is based on a single month following the abolition of the discount. Based on that graph you could argue that in the two months of Dec 23 and Jan 24 21.1% of new registrations were EVs. ie those who were going to buy bought early. And overall sales for that two month period were consistent with the trend. It will only become apparent what the impact was with extended monthly data rather than a single point.

Neither of the previous December to January periods exhibited a drop of that magnitude. They were 10% and 13%, respectively. Note also that if you intend to argue that "those who were going to buy bought early" you implicitly already accept that the end of the scheme has a major influence on purchasing.

Otherwise if it didn't matter, why would they buy early when December generally already has big costs for people because of Christmas?

I wasn't arguing either way rather just looking at it from a statistical perspective and avoiding subjective terminology. The point is that once we have a few months of 2024 out of the way and more data points we will see what the impact was of ending the scheme rather than a single data point.

I also don't recall spending the price of an EV (or even the deposit on one) on Christmas and I am not sure that, given the price of vehicles, your point is relevant. People who worry about the price of Christmas ain't going to be buying a new EV in any month.

Scott3

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#3191183 5-Feb-2024 18:06

mattwnz:

lchiu7:

Seemed like an edge case to me but for the Outlander owner. I guess quite an impact. It would be hard to sell the car with those conditions in place. Who is going to buy the car knowing they have to pay both petrol tax and RUC?

Maybe they can get the EV plug removed and then recertificated as a pure hybrid? But it seems so backwards and shows that these laws are like a sledgehammer trying the crack a nut.

That is exactly what the subject of the RNZ article is trying to have done...

Yes, a clear example of legislation creating a perverse incentive. Clearly it would be better for NZ for the car to continue to be plugged in each night using locally produced electricity for the first 15km each day, rather than having the owners spend thousands to delete that abilty and have the car re-certified all to reduce their tax burdon.

In reality I expect they will likely sell the car instead, but it is getting to be a fairly small neich of buyers for whom it would make sense. As their most frequent travel would need to be less than 15km.

Scott3

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#3191234 5-Feb-2024 18:42

mattwnz:

Technofreak:

Looking at overseas trends EV sales have slowed significantly in the last part of 2023 even with large price reductions. The early adopter bucket is full and the rest of the market is not ready or not able to to jump into the EV pool.

The price reductions being a two edged sword, why would I buy something today which I can get for less tomorrow.

It's impossible to attribute the reduction in sales numbers to any one parameter.

FOOP is also common in property . I wouldn't be surprised if there were big price discounts. In 2021 NZers were feeling rich with massive house price prices, and with the 8k clean car discount, they were buying EVs, mainly Teslas, in droves. The situation has totally changed now.

The auto market has changed heaps over the last few years, but you are right about us reaching the Chasm.

Automakers slash production at the start of the pandemic on recession fears
Microchip factory fires further constrain production
Contagious disease concerns encourage people away from public transport / taxi / ridehail and encourage buying of private cars
Turns out travel restrictions means cashed up people have their travel budget burning a hole in their pocket, and a lot of them want to upgrade their car
Government stimulus policies pump money into society
Both the new and used car markets go nuts pretty much globally. Used stuff is expensive, and anything new and desirable has a wait list.
in Feb 2022 we had the Russian invasion of Ukraine, which spiked oil prices, driving surging interest in EV's, hybrids etc. Both due to the cost of fuel, and a dislike in funding countries like russia.
NZ Clean Car discount thresholds were set incorrectly in hindsight and a policy that was meant to be fiscally natural ended up pumping hundreds of millions into the new car market, especially favoring cleaner cars.
Over the last 24 months globally we have had an absolute flood of new EV models come to NZ. The likes of the Kia EV6 & Tesla Model Y only started deliveries in volume to NZ in late 2022. With the exception of a couple of segments like off road style SUV's, 4x4 utes, over the last two years there is now enough range in plug in cars that most of the early market has made the leap.
We are now at the chasm on the adoption curve. Plug in cars in NZ in 2023 had a 14.74% market share

The 5 Stages of the Technology Adoption Curve | Omniplex ...

Economic conditions have cooled globally. Living cost inflation & higher interest rates, plus the re-opening of international travel (with way higher airfares), has sucked money out of the auto industry.
Oil prices have cooled to a level most of use are OK with.
Auto makers are still cranking production.
Globally we are looking at a bit of a global new vehicle glut, Especially for plug in vehicles.
NZ has just dropped it's clean car discount & at roughly the same time announced the intrduction of road tax to EV's at a rate 2.4x higher than what is paid by a yaris hybrid (non plug in). PHEV's that do a lot of running on petrol will get absolutely smoked

This timing is going to create quite a mess for the NZ auto industry.

Scott3

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#3191236 5-Feb-2024 18:59

ezbee:

It wil be interesting to see how this hits the biggest part of our car market Japanese imports.
If PHEVs took off in Japan the source of many of our vehicles.

Hopefully there will be enough non-PHEV options in imports.

The battery size is 1/10th to 1/5th the size of comparable full EV's so to cover any significant distance you are on petrol anyway.
They are not like logging trucks chewing small communities' roads to dust.

As a whole Used imports from japan will be fine.

If we look back to the 2019 year:

#1 model in japan was prius

#2 Nissan note

#3 Toyota Sienta

#4 Toyota Corolla

#5 Toyota Aqua

All fairly economical cars either exclusively hybrid, or with a hybrid version. All will get rewarded vs EV's at current EV RUC rates.

Plug in cars aren't very popular in japan, making up 1.8% of sales in 2021 and 3% in 2022. This is for a Varity of factors, like the popularity of apartment living, limited electrical capacity in homes that do have off street parking, bad image of electricity after nuclear disaster and associated rolling blackouts, fairly dirty power grid etc.

In fact NZ was getting close to tapping out Japan's supply of used EV's, and our demand would have been bidding up prices.

The mix of cars we buy from Japan will likely change. Under new policy many buyers (i.e. long distance commuters), looking for the cheapest possible car to run will now be looking at Prius & Aqua instead of leaf, as they need to pay less than half of the road tax of a leaf.

HarmLessSolutions

969 posts

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#3191237 5-Feb-2024 19:05

Scott3:

NZ has just dropped it's clean car discount & at roughly the same time announced the intrduction of road tax to EV's at a rate 2.4x higher than what is paid by a yaris hybrid (non plug in). PHEV's that do a lot of running on petrol will get absolutely smoked
This timing is going to create quite a mess for the NZ auto industry.

The other factor is that NZ's new government have a questionable attitude towards emissions reduction based on their performance so far, and have yet to show an ability to formulate cogent long term policies.

With a lack of clear direction so far as taxation and emissions strategies on transportation are concerned coming from the government the motor industry are essentially flying blind while trying to work with a rapidly changing market.

https://www.harmlesssolutions.co.nz/

Scott3

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#3191248 5-Feb-2024 19:51

HarmLessSolutions:

Scott3:

NZ has just dropped it's clean car discount & at roughly the same time announced the intrduction of road tax to EV's at a rate 2.4x higher than what is paid by a yaris hybrid (non plug in). PHEV's that do a lot of running on petrol will get absolutely smoked
This timing is going to create quite a mess for the NZ auto industry.

The other factor is that NZ's new government have a questionable attitude towards emissions reduction based on their performance so far, and have yet to show an ability to formulate cogent long term policies.

With a lack of clear direction so far as taxation and emissions strategies on transportation are concerned coming from the government the motor industry are essentially flying blind while trying to work with a rapidly changing market.

In terms of total emission reduction's, the ETS is still in tact, so we are going to see the same total reduction. Just what doesn't come from transport will need to come other sectors via a higher carbon price...

In terms of the auto industry, This interim period (of unknown length) where a BEV pays 2.4x the Road tax of a Yaris hybrid is going do decimate EV and PHEV sales at the lower end of the market. New car importers often have to lock in their orders well in advance. The combination of the RUC change and the end of the clean car discount will mean that many will have cars arriving that they know they now have little change at selling at a profit. This is likely to create a bad taste around Plug in car's for the entire industry.

Toyota NZ will be the big winner out of this. Their fleet mix is near perfect to for the new RUC settings. With the exception of a couple of low volume performance models, basically everything petrol is hybrid only, or has a hybrid option, and with fuel consumption numbers such that they will pay a lot less RUC than an EV. All their Low range SUV's, Utes & Vans are diesel, and will benefit from the end of the clean car discount.

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mattwnz

20141 posts

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#3191267 5-Feb-2024 21:31

Scott3:

Toyota NZ will be the big winner out of this. Their fleet mix is near perfect to for the new RUC settings. With the exception of a couple of low volume performance models, basically everything petrol is hybrid only, or has a hybrid option, and with fuel consumption numbers such that they will pay a lot less RUC than an EV. All their Low range SUV's, Utes & Vans are diesel, and will benefit from the end of the clean car discount.

That is the reason why there is a 1 year waiting list to get a hybrid RAV4

alasta

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#3191354 6-Feb-2024 07:45

HarmLessSolutions:

Late last year media were suggesting that the ETS tax on petrol was likely to be increased by 60c/L on petrol, on top of the existing 18c/L. That reasoning was based on this report https://ojs.victoria.ac.nz/pq/article/view/7496/6650

If that is the case it will largely cancel out any price saving that would result from the removal of FET (National Land Transport Fund) as blanket RUCs are rolled out and this would act as an incentive to reduce fossil fuel use as should be the case in terms of the current climate change benefitting strategies.

There is some merit in this as a way to deter people from unnecessarily buying utes, but it's not politically achievable given the current narrative around the cost of living crisis. Personally as a petrol car owner I don't mind paying a carbon tax on my petrol if it gets reinvested in public transport, but I think that might be unpopular with rural voters.

tdgeek

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#3191355 6-Feb-2024 07:48

alasta:

There is some merit in this as a way to deter people from unnecessarily buying utes, but it's not politically achievable given the current narrative around the cost of living crisis. Personally as a petrol car owner I don't mind paying a carbon tax on my petrol if it gets reinvested in public transport, but I think that might be unpopular with rural voters.

Methinks it will get "reinvested" elsewhere, like other climate change funds.

shk292

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#3191360 6-Feb-2024 08:45

mattwnz:

That is the reason why there is a 1 year waiting list to get a hybrid RAV4

That's been the case for the last couple of years so isn't related to the recent changes. It's more a reflection that the financial numbers, if done honestly, have always favoured hybrids over EVs for a lot of users. Plus the fact there is no directly comparable EV equivalent to a Rav4 hybrid without spending a lot more

SaltyNZ

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#3191362 6-Feb-2024 08:49

alasta:

There is some merit in this as a way to deter people from unnecessarily buying utes, but it's not politically achievable given the current narrative around the cost of living crisis.

We had one of those and the only people it disadvantaged were those buying brand new massive utes, who were precisely the people we wanted to discourage.

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alasta

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#3191379 6-Feb-2024 10:46

SaltyNZ:

alasta:

There is some merit in this as a way to deter people from unnecessarily buying utes, but it's not politically achievable given the current narrative around the cost of living crisis.

We had one of those and the only people it disadvantaged were those buying brand new massive utes, who were precisely the people we wanted to discourage.

The problem with the ute tax is that it only impacted new vehicles entering the fleet. An emissions tax on fuel is better because it also disincentivises utilisation of inefficient vehicles already in the fleet.

HarmLessSolutions

969 posts

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#3191389 6-Feb-2024 11:05

alasta:

SaltyNZ:

We had one of those and the only people it disadvantaged were those buying brand new massive utes, who were precisely the people we wanted to discourage.

The problem with the ute tax is that it only impacted new vehicles entering the fleet. An emissions tax on fuel is better because it also disincentivises utilisation of inefficient vehicles already in the fleet.

The CCD applied to both NZ new vehicles and secondhand imports. Was that not also the case for the 'ute tax' being payable for both new and secondhand imports?

ETA: I suspect that I've misinterpreted your point with "new" vehicles. Yes I agree that taxing the fuel itself is the best way to limit use of it, in the same way the taxation of tobacco has reduced smoking prevalence.

https://www.harmlesssolutions.co.nz/

SaltyNZ

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#3191390 6-Feb-2024 11:11

HarmLessSolutions:

The CCD applied to both NZ new vehicles and secondhand imports. Was that not also the case for the 'ute tax' being payable for both new and secondhand imports?

ETA: I suspect that I've misinterpreted your point with "new" vehicles. Yes I agree that taxing the fuel itself is the best way to limit use of it, in the same way the taxation of tobacco has reduced smoking prevalence.

Ditto; taxing the fuel more is the best way to deal with it. But the commission notes that in order for the ETS alone to have a meaningful impact, the price would need to be so high it would cripple the economy. Hence why money collected was being used to provide targeted grants to decarbonise major sources. I agree that ideally, the Glenbrook steel mill would've bought its own advanced electric furnace. But I'd rather my tax dollars be spent helping to ensure the planet remains a safe place to live than give tax cuts to people who already own more houses than they can live in.

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